Despite economic growth, inequality gap widens in Silicon Valley

Emmett Carson, CEO and president of the Silicon Valley Community Center, discusses housing and other inequality issues at Joint Venture Silicon Valley’s State of the Valley conference on Friday. (Lauren Goode/Peninsula Press)

SANTA CLARA, Calif. — Silicon Valley is booming. At least, that’s the message you might have heard during the first half of Friday morning’s keynote session at the State of the Valley conference in Santa Clara, Calif.

But despite job growth, a rise in average income and a continued perception of the Valley as a place for advancement and innovation, other numbers paint a picture of a “costly, brutal, expensive place,” grappling with stark inequality in race and gender.

According to new data from Joint Venture Silicon Valley’s annual State of the Valley Index report, 104,065 new jobs were added in the Bay Area in 2013. Forty-six thousand of these jobs were in Silicon Valley, marking a 3.5 percent growth rate over the past few years, according to Russell Hancock, the chief executive officer of Joint Venture Silicon Valley.

“The valley is sizzling,” Hancock said.

And the average annual earnings in Silicon Valley have hit $107,000, compared with an average income of $68,000 throughout the rest of the U.S. Home sales in 2013 were up 27 percent from the year prior.

But other numbers tell a tale of two Valleys.

Housing, not surprisingly, was a topic of discourse during the early part of the conference Friday. The average single-family home price in San Mateo County is more than $831,000, while the average price in Santa Clara county is $737,000 – numbers that have been rising steadily over the past two years.

As home prices rise and a vibrant economy draws in new residents, those on the low end are feeling the squeeze. The Valley saw 33,000 new residents last year; housing only increased by 8,000 units. Apartment rentals have gone up in price as well, with residents seeing an average increase of $1500 in rent last year.

Emmett Carson, chief executive and president of the Silicon Valley Community Foundation, stressed that housing is and continues to be a pressing issue in the Valley.

“If prices continue to rise, the people at the bottom end of the income pile either double up in housing…they move further out, or, they take a larger share of their already limited income to try to find housing,” he said.

“And a healthy economy has to have housing, for everyone that lives in that community,” Carson continued. “For all the jobs in the economy, there needs to be a place for people to live. Just having economic success alone is not going to work out.”

In terms of education, the Valley’s level of educational attainment is much higher than the overall state or nation, the new data shows, with 46 percent of adults having a bachelor’s degree or higher.

But this skews disproportionately towards Asians and whites, while the Latino population lags behind. Over 57 percent of Asians and 51 percent of whites in Silicon Valle have bachelor’s degrees or higher, compared with 11 percent of Hispanics of Latinos.

This translates to wide income gaps as well: Asians and whites have seen a significant increase in income per capita since 2010, while Latinos have experienced a slight decrease in income.

And, paging Sheryl Sandberg: Women’s educational achievements in the valley rival men’s in terms of degrees, but income is a different story. The individual median income for men with a bachelor’s degree or graduate degree is over $136,000 per year. For women, that number is $78,672.

Rachel Massaro, a senior research associate at Joint Venture Silicon Valley, says there are a variety of factors that might still be impacting women’s income levels.

“It might be that men and women tend to flock towards different types of jobs,” Massaro said in a pre-briefing this week. “Or it may be that women are asking for raises — and employers may not be giving them.”

“Rising tides do not lift all boats,” Carson said repeatedly. “We have to be intentional in our actions to address the inequality that we see.”